There two stages for profit maximization.

1. The first stage is output decision and consists of three different rules. Illustrate and discuss each of them individually in layperson terms.

2. The second stage of profit maximization is the shutdown rule. Thoroughly in layperson terms, discuss the shutdown rule for both long-run and short-run scenarios. Support your discussion with a graphical representation. More specifically, present two graphs with one above the other. In the top graph, illustrate the firm's optimal output decision. In the bottom graph, illustrate the profit function for the various cases of output presented in the top graph.